Paper Title
Productivity And Domestic Economic Factors: The Case Of The Australian Mining Industry

The current study analyses the impact of five domestic economic factors viz inflation rate, interest rate, mineral price, AUD-USD exchange rate and mineral export on the changes of Total Factor Productivity (TFP) in the Australian mining industry over the period 1989-90 to 2011-12. For TFP measurement, the Malmquist Productivity Index (MPI) was applied. The index enabled to examine the impact of the economic factors on not only productivity but also its components, efficiency change (catching-up effect) and technological change (frontier shift effect). The findings reveal that decline in the mining productivity was mostly attributed to technological regress or downward shift of production frontier rather than deterioration in efficiency. The Auto-regressive Distributed Lag (ARDL) models show that the economic factors significantly influenced the changes of productivity, efficiency and technology in the minerals sector in Australia. JEL Classification: C32; D24; E31; E43; F31; L71; L72. Keywords: TFP; MPI; economic factors; ARDL, Australian Mining Industry.